Dubai, UAE – 16 February 2026 – Invesco Ltd. expects continued acceleration in global demand for Shariah-compliant investment vehicles, driven by rising investor interest in ethical investing and the expanding availability of cost-efficient passive products that provide diversified equity exposure. As investors increasingly integrate sustainability and values-based considerations into their portfolios, Shariah-compliant solutions are gaining broader appeal beyond traditional markets.
“Islamic finance has evolved significantly since its establishment five decades ago, but growth has accelerated in recent years as investors gain access to cost-efficient exposure through UCITS ETFs offering Shariah compliance,” said Josette Rizk, Head of Middle East and Africa at Invesco. She added that as sustainable investing becomes more central to portfolio construction globally, demand for Shariah-compliant products continues to rise due to their inherent alignment with responsible, social, and ethical investment principles.
The EMEA ETF market recorded its strongest year on record in 2025, with more than $373 billion in net new assets. Momentum has continued into 2026 despite increased market volatility, with an additional $53 billion in inflows in January, bringing total assets under management to over $3.3 trillion. According to Dr. Chris Mellor, Head of EMEA ETF Equity Product Management at Invesco, ETFs are widely regarded as simple, relatively cost-effective, and efficient investment vehicles that provide access to diversified exposures. He noted that strong equity market performance and investors’ desire to broaden portfolio diversification contributed to the exceptional demand seen in 2025, particularly for global equity ETFs combining developed and emerging markets within a single product. Most all-world UCITS ETFs are passively managed and track benchmarks from major index providers such as MSCI and FTSE Russell.
Despite the rapid growth of the European ETF market over the past decade, product choice for Shariah-compliant investors remains relatively limited. Currently, around 10 equity UCITS ETFs meet Shariah requirements, with only three offering global developed market exposure and none combining developed and emerging markets into a single all-world structure. As a result, investors seeking comprehensive Shariah-compliant global exposure must allocate across regions separately, which can be inefficient and operationally cumbersome. Invesco believes the ETF market is positioned to evolve further to provide simpler and more cost-efficient solutions for Shariah investors seeking broad global equity exposure.
Index providers have also responded to growing demand by developing Shariah-compliant benchmarks across sectors, regions, and asset classes. The Dow Jones Islamic Market World Index, launched in 1999, was the first global Shariah-compliant benchmark and today underlies the largest Islamic ETF in EMEA, representing approximately one-third of Islamic UCITS equity ETF assets. In addition, MSCI has introduced a range of Shariah-compliant indices, including the MSCI ACWI Islamic M-Series Index, which provides exposure to companies across both developed and emerging markets worldwide. These indices apply business involvement and financial ratio screening methodologies to ensure adherence to Shariah principles, with oversight provided by independent Shariah committees.
“Investors are seeking simple and cost-efficient investment solutions that align with their sustainability preferences and values,” Rizk added. “The continued development of Shariah-compliant global indices represents an important step in expanding efficient access to international markets.”
Invesco Ltd. is one of the world’s leading asset management firms, employing more than 8,300 professionals and serving clients in over 120 countries. As of 31 December 2025, the firm managed US$2.2 trillion in assets across a comprehensive range of active, passive, and alternative investment strategies.
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